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| Eurozone crisis live: Slump in manufacturing signals deeper recession | Eurozone crisis live: Slump in manufacturing signals deeper recession |
| (40 minutes later) | |
| 10.22am: The eurozone unemployment rate has hit a new record high, adding to the tide of bad news that's swept over the Reuters terminal this morning. | |
| The jobless rate across the 17 countries which used the euro has risen to 10.9% in March, the most since the single currency was created. That equals the recent record set in early 1997 (comparable data only goes back to 1995). | |
| 9.55am: Markit's verdict on today's manufacturing data is that the core of the eurozone is now suffering the full force of the economic crisis. | |
| Chris Williamson of Markit commented: | |
Austerity in deficit-fighting countries is having an increasing impact on demand across the region. Even German manufacturing output showed a renewed decline, attributed by many firms to weak demand from southern Europe. | |
| As such, it is hard to see where growth will come from in coming months, unless export demand picks up strongly from countries outside of the Eurozone. | |
| The ECB's latest forecast of merely a slight contraction of GDP this year is therefore already looking optimistic. | |
| 9.45am: Manufacturing output across the eurozone as a whole fell to a 34-month low in April, with most countries suffering lower activity (see 8.54am for some of the key data). | |
| This dragged down the eurozone manufacturing PMI to a 34-month low of 45.9. | |
| Crucially, the 'core of the eurozone' suffered as badly as the peripherery. Here's a table showing the key numbers, with just two countries coming in above the 50 point mark - and the four largest economies all shrinking. | |
| Austria: 51.2 4-month low Ireland: 50.1 2-month low Netherlands: 49.0 3-month low France: 46.9 2-month high Germany: 46.2 33-month low Italy: 43.8 6-month low Spain: 43.5 34-month low Greece: 40.7 2-month low | |
| 9.27am: The implosion at Greece's factories is actually gathering pace. | 9.27am: The implosion at Greece's factories is actually gathering pace. |
| Its manufacturing PMI slumped to 40.7 in April, from 41.3, which means the sector moved even further away from growth (a reading of 50 would have meant it flatlined). The data disappointed City experts who hoped that Greece's economic decline might finally be flattening out. | Its manufacturing PMI slumped to 40.7 in April, from 41.3, which means the sector moved even further away from growth (a reading of 50 would have meant it flatlined). The data disappointed City experts who hoped that Greece's economic decline might finally be flattening out. |
| So much for my "hit bottom" theory RT @EKourtali: Greek AprilPMI falls to 40.7 (vs 41.3 in march), new orders, jobs, drop sharply (RTRS) | So much for my "hit bottom" theory RT @EKourtali: Greek AprilPMI falls to 40.7 (vs 41.3 in march), new orders, jobs, drop sharply (RTRS) |
| — P M (@Pawelmorski) May 2, 2012 | — P M (@Pawelmorski) May 2, 2012 |
| 9.16am: Here's a snap verdict on the latest Eurozone data -- the recession is even worse than we feared, and the pressure for a 'growth strategy is only going to intensify. | 9.16am: Here's a snap verdict on the latest Eurozone data -- the recession is even worse than we feared, and the pressure for a 'growth strategy is only going to intensify. |
| This graph shows how the region's manufacturing output has slumped in recent months. | This graph shows how the region's manufacturing output has slumped in recent months. |
| 9.09am: More gloom. The Italian unemployment has leapt to 9.8% for March, the highest level since the current index began in 2004. | 9.09am: More gloom. The Italian unemployment has leapt to 9.8% for March, the highest level since the current index began in 2004. |
| Youth unemployment was particularly bleak, with the jobless rate among 15-24 year olds rising to 35.9 in March, from 33.9%. | Youth unemployment was particularly bleak, with the jobless rate among 15-24 year olds rising to 35.9 in March, from 33.9%. |
| 9.00am: The latest German unemployment data has also missed expectations. | 9.00am: The latest German unemployment data has also missed expectations. |
| The number of people out of work rose by 19,000 in April to 2.875m, on a seasonally adjusted basis. That puts the unemployment rate at 6.8% - still well below the eurozone average - but a little higher than economists had predicted. They had expected a 10,000 drop in the seasonally adjusted jobless count. | The number of people out of work rose by 19,000 in April to 2.875m, on a seasonally adjusted basis. That puts the unemployment rate at 6.8% - still well below the eurozone average - but a little higher than economists had predicted. They had expected a 10,000 drop in the seasonally adjusted jobless count. |
| 8.54am: New manufacturing data from across the eurozone has just been released, and it's pretty poor. | 8.54am: New manufacturing data from across the eurozone has just been released, and it's pretty poor. |
| Italian and French factories have suffered their biggest drop in new orders in three years, while Germany's manufacturing output shrank at its fast pace since July 2009. | Italian and French factories have suffered their biggest drop in new orders in three years, while Germany's manufacturing output shrank at its fast pace since July 2009. |
| Italy's manufacturing PMI* has slumped to a six-month low of 43.8 in April, down from 47.9 in March. That means that the sector shrank at a faster rate (any number below 50 = contraction). | Italy's manufacturing PMI* has slumped to a six-month low of 43.8 in April, down from 47.9 in March. That means that the sector shrank at a faster rate (any number below 50 = contraction). |
| The French manufacturing PMI is little better. It came in at 46.9 for April - slightly higher than March's 46.7, but well below economist's predictions. | The French manufacturing PMI is little better. It came in at 46.9 for April - slightly higher than March's 46.7, but well below economist's predictions. |
| Ditto Spain, whose manufacturing PMI fell to 43.5 in April, down from 44.5 in March. That means the Spanish manufacturing sector has been shrinking for a full year. | Ditto Spain, whose manufacturing PMI fell to 43.5 in April, down from 44.5 in March. That means the Spanish manufacturing sector has been shrinking for a full year. |
| And for Germany, its manufacturing PMI fell to 46.2, from 48.4 in March. That's a 33-month low. | And for Germany, its manufacturing PMI fell to 46.2, from 48.4 in March. That's a 33-month low. |
| * - Purchasing Managers Index, released by Markit, based on interviews with executives at businesses across a sector | * - Purchasing Managers Index, released by Markit, based on interviews with executives at businesses across a sector |
| 8.35am: Europe's stock markets have posted early gains as traders get back to work after May Day. The German DAX and the French CAC are both up around 1.5%, with the Spanish IBEX and Italian FTSE MIB gaining around 0.5%. | 8.35am: Europe's stock markets have posted early gains as traders get back to work after May Day. The German DAX and the French CAC are both up around 1.5%, with the Spanish IBEX and Italian FTSE MIB gaining around 0.5%. |
| It's not so cheery in the City, where the FTSE is down 9 points (after a 75-point rally yesterday). | It's not so cheery in the City, where the FTSE is down 9 points (after a 75-point rally yesterday). |
| We'll soon see if the latest economic data from the eurozone knocks the markets. As Michael Hewson of CMC predicted this morning: | We'll soon see if the latest economic data from the eurozone knocks the markets. As Michael Hewson of CMC predicted this morning: |
| The one positive is likely to be German unemployment data which has run contrary to the rest of Europe's unemployment data for months now, slipping as it has to post reunification lows of 6.7%. Another drop is expected in April with a drop of 10k expected. There the good news is expected to end because the Eurozone unemployment is expected to rise further, with a March figure rising to 10.9%. | The one positive is likely to be German unemployment data which has run contrary to the rest of Europe's unemployment data for months now, slipping as it has to post reunification lows of 6.7%. Another drop is expected in April with a drop of 10k expected. There the good news is expected to end because the Eurozone unemployment is expected to rise further, with a March figure rising to 10.9%. |
| 8.22am: Canada's finance minister has a simple message for Europe's leaders today: "Fix your own mess". | 8.22am: Canada's finance minister has a simple message for Europe's leaders today: "Fix your own mess". |
| In an opinion piece published in Canada's National Post today, Jim Flaherty argued that Europe has the resources it needs to resolve the debt crisis itself, and that its relative wealth means it has no place looking overseas for help. | In an opinion piece published in Canada's National Post today, Jim Flaherty argued that Europe has the resources it needs to resolve the debt crisis itself, and that its relative wealth means it has no place looking overseas for help. |
| Here's one of the key quotes: | Here's one of the key quotes: |
| We cannot avoid the question of fairness. Eurozone members benefit from increased exports and price stability. Spreading the risks of the eurozone around the world, while its benefits accrue primarily to its members, is not the way to resolve this crisis. We cannot expect non-European countries, whose citizens in many cases have a much lower standard of living, to save the eurozone. | We cannot avoid the question of fairness. Eurozone members benefit from increased exports and price stability. Spreading the risks of the eurozone around the world, while its benefits accrue primarily to its members, is not the way to resolve this crisis. We cannot expect non-European countries, whose citizens in many cases have a much lower standard of living, to save the eurozone. |
| Further, the IMF, with roughly $400-billion, already has adequate resources to deal with imminent needs. | Further, the IMF, with roughly $400-billion, already has adequate resources to deal with imminent needs. |
| Flaherty (the longest-serving finance minister in the G7) was pretty clear that Europe has botched the crisis (many readers may agree, but it's unusual to hear it spelled out so bluntly by a senior politician). He said Canada has been rewarded for its actions with a solid AAA credit rating, while the eurozone has fallen short: | Flaherty (the longest-serving finance minister in the G7) was pretty clear that Europe has botched the crisis (many readers may agree, but it's unusual to hear it spelled out so bluntly by a senior politician). He said Canada has been rewarded for its actions with a solid AAA credit rating, while the eurozone has fallen short: |
| The "muddle through" approach has led to an erosion of confidence in public leadership and too many missed opportunities. | The "muddle through" approach has led to an erosion of confidence in public leadership and too many missed opportunities. |
| Worth noting that the IMF said last month it was concerned about Canada's rising household debts, with interest rates pegged low. Flaherty's recent budget included spending cuts and public sector job cuts. | Worth noting that the IMF said last month it was concerned about Canada's rising household debts, with interest rates pegged low. Flaherty's recent budget included spending cuts and public sector job cuts. |
| We already knew that Canada would not contribute to the IMF's new firewall to protect the world economy from the euro crisis. But perhaps most alarmingly for Europe, Flaherty also argues that its influence within the IMF should be curtailed. As Europe controls 34% of the voting rights, major decisions about resources dedicated to Europe should "require more than a simple majority". | We already knew that Canada would not contribute to the IMF's new firewall to protect the world economy from the euro crisis. But perhaps most alarmingly for Europe, Flaherty also argues that its influence within the IMF should be curtailed. As Europe controls 34% of the voting rights, major decisions about resources dedicated to Europe should "require more than a simple majority". |
| 8.15am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis. | 8.15am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis. |
| Overnight, Canada's finance minister Jim Flaherty has blasted Europe for failing to fix its debt crisis. In a blunt attack on European leaders, Flaherty said they were wrong to expect the international community to bail them out, and reiterated that Canada will not provide more funds for the IMF. More on this shortly. | Overnight, Canada's finance minister Jim Flaherty has blasted Europe for failing to fix its debt crisis. In a blunt attack on European leaders, Flaherty said they were wrong to expect the international community to bail them out, and reiterated that Canada will not provide more funds for the IMF. More on this shortly. |
| After the drama of May Day, it's a normal working day across Europe again. European stock markets are already gaining in early trading, having missed yesterday's bounce. | After the drama of May Day, it's a normal working day across Europe again. European stock markets are already gaining in early trading, having missed yesterday's bounce. |
| With Greece and France just four days away from crucial elections, there should be plenty of action in both countries. | With Greece and France just four days away from crucial elections, there should be plenty of action in both countries. |
| Also coming up, new manufacturing data for the eurozone, as well as the latest unemployment stats. | Also coming up, new manufacturing data for the eurozone, as well as the latest unemployment stats. |